Unless you’ve been living under a rock, you might have heard about the Autumn Budget that got announced recently.
The Autumn Budget 2024 delivered some big updates for small business owners, freelancers, and landlords. From changes to Employer’s National Insurance to updates on Making Tax Digital and fuel duty freezes... needless to say, there’s a lot to unpack.
Here’s a rundown of the key points that could affect you and your business:
Employer’s National Insurance: what’s changing?
From April 2025, businesses will see significant changes to Employer’s National Insurance. Both the threshold and the rate are shifting, which could mean paying more on your employees’ wages.
Here’s what you need to know:
- Higher Rate: The Employer’s NI rate will increase from 13.8% to 15%.
- Lower Threshold: Employers will now pay this higher rate on earnings over £5,000 instead of £9,100.
- Increased Employment Allowance: The good news? Small employers can deduct up to £10,500 (up from £5,000) from their Employer’s NI bill.
While these changes could mean higher costs, the increased allowance will give some much-needed relief for small businesses.
National Living Wage gets a boost
For freelancers and business owners with employees, the National Living Wage is rising to £12.21 per hour for anyone aged 21 and over, effective as of April 2025.
This increase is of course great for workers, adding an extra £1,400 a year for full-time employees. However, businesses need to start factoring in these costs when planning their budgets for next year.
Making Tax Digital: a renewed commitment
Making Tax Digital (MTD) is here to stay, and the government has confirmed its rollout plans:
- From April 2026: Self-employed individuals and landlords with incomes over £50,000 must use MTD.
- From April 2027: This threshold drops to £30,000.
- By the end of the decade: Those earning over £20,000 will also need to comply.
We’re big fans of using technology to simplify finances. If you’re not already using invoicing and accounting software to manage your taxes, now’s the time to consider it. Payment Bear helps you simplify invoicing, so staying on top of your finances is easier than ever and you’ll be ready for the upcoming deadlines.
Corporate Tax Roadmap: stability for Small Businesses
The government’s new Corporate Tax roadmap confirmed that the Corporation Tax rate will remain capped at 25% for the foreseeable future. For small businesses, the Small Profits Rate stays at 19% for profits under £50,000, with Marginal Relief for profits up to £250,000.
In addition to this, full expensing—allowing 100% tax relief on qualifying equipment purchases—will continue. This is great news for small businesses looking to invest in their growth.
Updates on Business Rates and Reliefs
Retail, hospitality, and leisure businesses will continue to benefit from reliefs, but at a reduced rate. From 2025/26, the relief drops from 75% to 40%, with a cap of £110,000 per business.
For smaller businesses, the small business multiplier will remain frozen at 49.9p, helping to keep costs manageable.
Good news for drivers: Fuel Duty frozen
If your business relies on vehicles, the fuel duty freeze continues for another year (phew). This extends the 5p cut introduced in 2022 until March 2026, saving the average driver around £59 annually (every little helps!)
Increased Capital Gains Tax and Stamp Duty
For landlords or businesses with property investments, there are some changes to be aware of:
- Higher Rate of Stamp Duty for Second Homes: From October 2024, the rate increases from 3% to 5%.
- Capital Gains Tax: The lower rate will rise from 10% to 18%, and the higher rate from 20% to 24%.
Planning ahead
Yes, some of these changes do mean there are extra costs, but other changes also offer opportunities for savings or relief. Staying informed is the first step to managing your business effectively in the face of these updates.
At Payment Bear, we’re here to help small business owners and freelancers navigate the financial landscape with ease. Whether it’s managing invoices or getting paid on time, we’ve got the tools to keep your business running smoothly.
Want to learn more? Get started with Payment Bear today!
Disclaimer: The content in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your specific circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post.
